[Congressional Record Volume 157, Number 36 (Thursday, March 10, 2011)]
[Senate]
[Pages S1525-S1528]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DEBT AND NATIONAL SECURITY
Mr. THUNE. Madam President, I rise to talk about our Nation's
security and what the Chairman of the Joint Chiefs of Staff, ADM Mike
Mullen, recently said is the greatest threat to America's future. He
mentioned not too long ago that the greatest threat to America's
national security is our national debt, not al-Qaida or the Iranian
nuclear threat or instability in the Middle East or Russian spies but
our national debt.
That is a stunning statement, but I think it is backed up by the
numbers. We are more than $14 trillion in debt.
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It took 220 years of American history, up to the beginning of 2009 and
with 43 American Presidents, to pile up $6.3 trillion in publicly held
debt. Under the Obama administration's latest budget, we will double
that in another 2 years and triple it in 10. That budget calls for a
sizable annual deficit every single year for the next 10 years. The
smallest budget deficit we would face would be $607 billion in the year
2015, and then our deficits would start rising again.
That is what the White House calls a balanced budget. I would call it
a joke, but it is no laughing matter. We just learned China holds even
more of our debt than the Treasury had previously thought--26 percent
of total U.S. debt held by foreigners. The President's budget
inevitably would add to that.
That crushing debt burden we are imposing on future generations will
seriously limit their ability to live the American dream. For
generations in this country, parents have sacrificed so their children
could have a better life, but today we are standing that tradition on
its head. Excessive spending and debt threaten to make the next
generation the first in our history to have a lower standard of living
than the one that came before. That was not what my parents did. My
father fought in World War II. He worked hard as a teacher, a coach, he
drove the schoolbus, ran a motel in my hometown, and basically did any
job he could and made whatever sacrifices he needed to make in order to
keep our family fed, clothed, and sheltered. His father before him, my
grandfather, traveled to this country from Norway and worked doing hard
labor laying the railroad across the Plains. He started his own
hardware store and ran it through the Depression and war until he
couldn't work anymore. He knew what it meant to sacrifice to take care
of his family.
But today, Washington seems to be saying the generations to follow us
will have to sacrifice so we will not have to make the tough choices.
We don't want to do the hard work of living within our means, so our
children and our grandchildren will just have to get by on less. Every
one of us in this Congress should be ashamed of that prospect.
But more than shame for what we are doing to future generations, we
should be alarmed about what we are doing to our economy today. That
skyrocketing debt means a burden of uncertainty on our businesses,
small and large alike. When businesses and people are uncertain if
there will be a fiscal crisis, they limit their investment. Added to
the stifling amount of overregulation coming out of Congress and the
administration these past 2 years, it means businesses have one more
reason to worry about whether they can afford to add another person to
the payroll. That means fewer jobs.
One influential study, endorsed by none other than Treasury Secretary
Geithner, found that countries with very high debt burdens suffer from
lower economic growth rates. Median growth rates for countries with
public debt above roughly the 90 percent of GDP threshold are about 1
percent lower than otherwise. The reasons for this are simple:
Government borrowing crowds out private investment. The less productive
public sector takes resources that could and would be better used by
the more productive private sector.
We have already crossed the dangerous 90 percent threshold--gross
debt was 93 percent of GDP at the end of last fiscal year and will top
the 100 percent barrier by the end of this fiscal year. Under the
President's budget, the debt will continue to grow rapidly, eventually
reaching 107 percent of GDP--and that is even with the gimmicks and
questionable assumptions the White House budget proposal contains,
including what I believe are very unrealistic economic growth
assumptions.
President Obama's own economic advisers have estimated that a 1-
percent increase in GDP translates into 1 million more jobs. Many more
people would have jobs today if it weren't for this crushing debt
burden.
We did finally have some good news last Friday about private sector
job creation. Nobody was happier than I to see that. But the fact
remains that the labor force participation rate in the latest
unemployment figures was unchanged at 64.2 percent, the lowest level it
has been since the early 1980s. A lot of workers have been so
discouraged with the lack of jobs they have simply stopped looking.
Let us not forget our recovery so far has lagged far behind past
recessions. At this point after the 1981-1982 recession, the economy
had already expanded to 10 percent. But the current recovery has only
expanded the economy by .14 percent. That is not good enough. We all
know if we don't act soon to get control of Federal spending and our
soaring debt, any good news will be short-lived.
For 2 years, the Pied Pipers of big government told us they could
spend their way out of financial troubles; that the money was free and
it would lead to jobs, jobs, jobs. Well, they were wrong, and 2 years
of their policies have left us dramatically worse off. It is simple:
Too much government spending means too much government debt. That means
a weaker economy and fewer jobs.
I think we are finally at the point where most people, even here in
Washington, are willing to concede we need to get a handle on our
spending. Even the Obama administration--the biggest spending White
House in history--has finally come around to the realization that just
maybe we should let the credit card cool off a bit.
There is no better time in America's history to change course
regarding Federal spending. We are at a moment when we are about to get
hit by a succession of three budgetary waves. First, the end of the 2-
week continuing resolution on March 18. Then we will have to address
the debt limit sometime this spring. After we have dealt with those two
matters, we need to take up the budget for fiscal year 2012 because the
new fiscal year is only 6 months away.
None of those is a mystery. None of them snuck up on us. We have seen
them all coming. We have had plenty of warning. We have no excuse for
being unprepared. I am confident we can come together and solve all
three of those issues. We showed we can do it with the 2-week CR,
finding $4 billion of spending that we could agree was not our most
important national priority right now and could be cut. Thanks to the
great work of our friend and colleague, Dr. Coburn, the GAO has
confirmed there are hundreds of billions of dollars in waste and
duplication we can begin to scrub out of our Federal budget.
That is our short-term situation--those three challenges. But there
has also been talk of a balanced budget amendment, and I am a cosponsor
of two balanced budget amendments. That is not a short-term fix. That
is a long-term issue. So that is the short term and the long term.
In the midterm, we need to come up with additional solutions to get
us off what I call Federal fiscal irresponsibility, budgetary
brinksmanship, and deficits as far as the eye can see. We need to get
back on the path of prosperity, and that path cannot be built on
borrowed money and reckless spending. Getting back on the right path
will require us to fix our broken budget process.
To that end, I am proud to reintroduce a bill I introduced last year
that would establish commonsense reforms to improve transparency and
efficiency in our budgeting process. I am proud Senators Chambliss,
Crapo, Inhofe, Johanns, Kirk, Portman, and Wicker have joined me in
cosponsoring S. 439, the Deficit Reduction and Budget Reform Act of
2011.
If we don't do something to fix this broken system and soon, we are
going to keep getting hit by these budget waves, and sooner or later
they are going to sink us.
My proposal has three main parts. The first is budget reforms. I
propose we start by reforming pay-go rules to prevent the double-
counting gimmicks that too often are used around here, particularly
with regard to our trust funds. We saw that double counting occur
during the health care debate last year, when hundreds of billions of
dollars were doubled counted--essentially spent twice--during the
health care debate.
My proposal would make the Federal budget a binding joint resolution
signed into law by the President. Today, it is a nonbinding resolution
and routinely gets waived.
My proposal calls for a biannual budget timeline. There is more time
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for oversight and to see what is working doing a budget every other
year--during the odd-numbered years--and then during the even-numbered
years doing oversight. So instead of looking for ways to spend taxpayer
dollars, we look for ways to save taxpayer dollars.
My proposal also calls for a legislative line-item veto. Governors
have it; the President should too.
My proposal would prevent the abuse of emergency spending
designations, which, again, have become all too routine and all too
frequent around here, to get around spending caps.
My proposal calls for the creation of a new CLASS Act trigger, if
that new entitlement program is not solvent over a 75-year timeframe.
I would also modify the Medicare cost containment trigger to have
honest accounting with respect to revenues and savings in the new
health care bill.
My proposal also would update the Credit Reform Act to score the
purchases of debt, stock, equity, and capital using a discount rate
that incorporates market risk rather than the procedure that has been
used in the past which, in my view, completely understates the cost of
many of these programs.
I call for a new standing joint committee of Congress for budget
deficit reduction. If you can believe this, there are 26 committees or
subcommittees that spend tax dollars and not one that saves tax
dollars. That joint committee would be responsible for producing a bill
to cut the deficit by at least 10 percent every budget cycle without
raising taxes. This bill would get expedited consideration in both
Chambers of Congress and use only spending reductions, not tax
increases. Tax increases would be off the table. A standing committee--
not just issuing one report and closing up shop--its recommendations
would get an up-or-down vote in Congress.
There is a precedent for doing this. I see the Senator from West
Virginia on the floor. Back in the 1940s, there was a Senator from West
Virginia named Harry Byrd. As they were debating whether to raise taxes
to fund World War II, he came up with an idea and said: Before we do
that, we ought to look at savings we can find in our Federal budget. So
he proposed a joint committee called the Joint Committee on the
Reduction of Nonessential Federal Expenditures. They went about the
process of scrubbing the Federal budget to see if there might be
savings that could be achieved that would prevent having to raise taxes
to fund the war effort. In the process of doing that, that committee
achieved a great many things. It was in existence for about 30 years.
What this would do is draw on that precedent and create a joint
standing committee in the Congress that would be bicameral--10 House
Members, 10 Senate Members--bipartisan--10 Republicans and 10
Democrats--and would have a statutory requirement each budget cycle for
coming up with a specified amount of savings in deficit reductions
through spending reductions.
What would we do in the short term? This proposal would freeze and
cap spending. It would propose a 10-year spending freeze at 2008 levels
adjusted for inflation. After all, nondefense discretionary spending
has increased at an alarming rate since 2008--a 22-percent increase,
when inflation has been roughly 2 percent. In other words, nondefense
discretionary spending has grown in the last 2 years at 10 times the
rate of inflation.
As I said, this is not a quick fix. No plan is going to solve our
problems overnight, and I hope we do not take seriously anyone who
claims to have a plan that will. But just the same, I do not think we
should take seriously any plan that claims that an annual deficit of
$607 billion is the same as a balanced budget. It is not the same, and
it is not good enough. The only thing that is good enough for our
children and for the future prosperity of this great country is for us
to get our fiscal house in order and to embrace responsible budgeting.
We cannot continue to spend money we do not have. We have to learn.
Like the American people have learned to live within their means, we
have to learn how to tighten our belts.
I wish to close with a couple of statements.
I mentioned earlier the statement by the Chairman of the Joint Chiefs
of Staff, ADM Mike Mullen, with regard to the greatest threat to our
national security being our national debt, but I also want to quote
what Secretary of State Hillary Clinton called the unexpected $1.3
trillion U.S. deficit. She referred to it as a ``message of weakness
internationally,'' and she went on to say:
It poses a national security threat in two ways: it
undermines our capacity to act in our own interest, and it
does constrain us where constraint may be undesirable.
That is Secretary of State Hillary Clinton with regard to these year-
over-year massive deficits we continue to run.
Just today, we heard that PIMCO, one of the largest mutual funds in
the country, has decided to dump government debt--its government debt.
In that story that came out today that was discussing that particular
move on their part, there was a quote from a gentleman, Jim Rogers, who
is the cofounder of the Quantum Fund. He said:
U.S. Government bonds are not a safe haven. I cannot
conceive of lending money to the U.S. Government for 30
years.
Think about that--the United States of America is being viewed
increasingly as an unsafe investment because of this massive debt we
are running and what it could mean to the future with regard to
inflation and interest rates and the health of our economy and its
attractiveness to people not only here at home but around the world as
a place for investment.
We have a major problem. These are serious times. These are serious
problems. These are serious challenges. They require serious solutions
and serious leadership. I hope here in the Senate we are up to that.
As I said before, it starts on several levels. In the near term, we
need to get the spending under control. We are trying to do that with
the discretionary spending bill that is in front of us. We need to deal
with the longer term issue. I hope we can pass a balanced budget
amendment. We have had votes on that in the past here in Congress,
unsuccessfully, narrowly. But we need to put in place what so many
States have that require them on an annual basis to balance their
budgets. Then we need to put in place budget process reforms that, in
my view, will put more of a straitjacket on the Congress and force us
to make more of these hard decisions.
I think, frankly, because we do this every year, this budget every
year, we get very occupied with 12 appropriations bills in the budget--
although last year we did not even pass a budget, nor did we pass a
single appropriations bill, which is a major failure of this Congress
when you are running a $3.7 trillion enterprise called the Federal
Government. But in our annual schedule, we need to provide time to do
oversight, time to look at what we can be doing not to spend more money
but to save money.
If we had a biennial budget process where we are spending money in
odd-numbered years and doing the appropriations bills in those years,
and then in the even-numbered years, when people go home to run for
election, instead of looking for ways to spend money, we are actually
looking for ways to save money, I think these reforms are long overdue.
I hope my colleagues will take seriously this issue of budget process
reform. I know it is not glamorous subject. In fact, most people's eyes
glaze over when we talk about budget process reform. But, in my view,
there is not anything we could do that would more fundamentally change
the way Washington works than reforming this budget process because it
drives everything else. If we do not start there, we are never going to
get this issue of spending and debt under control in the long term.
I thank my colleagues who have cosponsored this bill. I hope there
will be more colleagues who will join on this bill--if not this one,
something like it--that will once and for all change the way Washington
works by undertaking reforms in our budget process that will lead us to
greater fiscal responsibility and greater prosperity for future
generations.
I yield the floor.
The PRESIDING OFFICER (Mr. Blumenthal). The Senator from West
Virginia.
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